Presentation on theme: "The Marketing Research Process"— Presentation transcript:
1 The Marketing Research Process Chapter TwoThe Marketing Research Process
2 Chapter Objectives Identify major steps in marketing research process Explain the interrelationship among and interdependence of the process stepsUnderstand when to use external providers and how to evaluate themDevelop your view of marketing research ethics and describe some of the ethical gray areas that exist
3 Research ProcessThe Research Process is an interrelated sequence of steps that make up a research projectResearch process stepsJustify the need for marketing researchDefine the research objectiveIdentify data needsIdentify data sources
4 Research Process (Cont’d) The steps are (cont’d)Choose appropriate research design and data collection methodDesign the research instrument or formIdentify the sampleCollect data, including any relevant secondary dataAnalyze and interpret the dataPresent the research findings to decision makers
6 Research Process - Interrelated Example of Interrelationship:At the first step the researcher must understand what is involved in the remaining stages
7 Justify the Need for Marketing Research Four ConsiderationsPotential usefulness of the resultsManagement attitudes towards marketing researchResources available for implementationCosts vs. benefits
8 Potential Usefulness of the Results The extent to which findings are likely to reduce uncertainty or provide relevant informationKFC in BrazilTested how their product was perceived by Brazilian consumersThey did not test their product against other more traditional Brazilian chicken productsResult: research findings useless
9 Management Attitudes Towards Marketing Research Management must trust the research findings for them to be usefulWhirlpoolConducted marketing research in Europe that determined consumers in different countries favored different featuresWhirlpool management had already decided to release the “World Washer” to be sold in all countriesThey ignored the research findings, thus making the project worthless
10 Resources Available for Implementation A company must have the resources to fully implement recommended decisions for the information to be usefulX-Disk CorporationOperating at 95% CapacityMarketing research determines there is a market for new productCapacity is not enough to meet new product demandBack to square one, as the marketing research was useless without the resources to implement
11 Costs vs. BenefitsA company must have the resources to fully implement recommended decisions for the information to be usefulDetermining Research CostsQuantify the necessary research stepsDetermine the BenefitsNature of the uncertainty it will alleviateProjected financial benefitsDecision maker intuitionDo you think it is harder to determine cost or to determine benefit?
12 Justify the Need for Marketing Research (Cont’d) Brenda Page is considering a new product for her company. The product will require a 10% market share to break even. Intuition and experience tell Brenda that the product will probably receive 8% market share.Brenda has LOW potential benefitBrenda is pretty sure that the product will not meet the necessary market share. The marketing research might determine that Brenda was incorrect and it will meet the necessary market share, but it most likely will not be high enough to be profitable.
13 Justify the Need for Marketing Research (Cont’d) Jerry Wilson is deciding between possible commercials for a new product his company is promoting. Both have been proven to have good results on certain products and bad on others, however neither commercial has been used on a product similar to theirs.Jerry has HIGH potential benefitThere is much more ambiguity in Jerry’s decision and the benefit of knowing the information is much higher
14 Conducting Small Budget Marketing Research Treat every employee as a marketing researcherBe on the look out for how your product or your competitors’ products are being usedWatch for trendsShare informal reports at meetingsSend employees to observe customers
15 Conducting Small Budget Marketing Research (Cont’d) Send employees to interview tradeshow attendeesCosts as little as $1,000 compared to the traditional $5,000Use warranty cards or product registration cards to collect information on your customersProvided by David Gordon, CEO Angell Research & past Chairman of AMA
16 Defining the Research Objective Most Critical StepEstablishing the project’s purpose through effective communication between the decision maker and the researcher allows them to establish clear-cut and agreed upon research objectives
17 Defining the Research Objective (Cont’d) Key: Accurate definition of the problem and all potential causesMarketing ProblemExploratory research fueled by client/researcher communicationPotential causeDecide which causes most directly effect the problemDecide if these issues are worth followingGoal: Decide on clear cut research objectives
18 Pac-N-Sac Paper Products Company– Defining the Research Objective Marketing Problem: Paper product sales downManager assumes that the potential cause is a promotional problemTeam decides if these issues are worth following up onThey decide that the goal will be to find more effective promotionsActual Problem: Industry sales decreasingBecause they did not consider all the possible causes, they missed the true cause of the sales declineFaulty research objectives = Faulty recommendations
19 Avoiding Mistakes in Problem Definition Accurate definition of a project’s purpose requiresIdentifying all relevant issuesDeciding which of the issues are worth examining further
20 Avoiding Mistakes in Problem Definition – Captain Morgan Gold StrategyCapture more of the ready-to-drink alcoholic beverage marketAlternate StrategyRevive sagging profitsApparent AssumptionThe popularity of Captain Morgan Rum would translate into popularity for Captain Morgan Gold.
21 Captain Morgan Gold (Cont’d) Examined Wrong ProblemMarketing Research centered around evaluating the popularity of the Captain Morgan Rum brand and not discovering adult consumer needs and preferencesMistakeFailed to examine what adult consumers are looking for in the ready to drink alcoholic beverage categoryFocused on copying competitors
22 Avoiding Mistakes in Problem Definition Effective Communication is a MustEffective dialogue is critical for properly diagnosing any situation calling for the use of marketing researchEspecially important when the purpose of research is to explore opportunitiesThe chances that a wrong or nonexistent problem will be researched are greatly increased when there is a lack of communication
23 Identifying Data Needs StepsScrutinize the research purposeList the types of data that will fulfill this purpose
24 Identifying Data Sources Primary DataData obtained directly from consumer to fulfill a specific purposeSecondary DataData that are readily available from other sources
25 Choosing the Appropriate Research Design Exploratory Research: Used to gain initial insights and may pave the way for further research.Conclusive Research: Used to verify insights and select appropriate course of action. Can be either descriptive or experimental.
26 Choosing the Appropriate Research Design (Cont’d) Research ProposalServes as a blueprint for the execution of the productExplainsPurpose and scope of the projectThe specific design of the projectSample designData collection proceduresThe data analysis planThe project timetableThe estimated cost of the project
27 Choosing the Appropriate Research Design (Cont’d) Example Dialogue QuestionsWhy am I conducting this research?How can I tell if my project has been a success?When and where will data be collected?Which pieces will be done internally and which will be done externally?How will results be communicated in the organization?GoalStimulate meaningful dialogue between the researcher and decision maker
28 Questions That Need to Be Answered by the Client/Marketing Researcher Team Why am I conducting this research ?How will I tell if my project has been a success ?What method will be used ?What questions will be asked ?Who will be interviewed ?How will you get contact information for potential respondents?When and where data will be collected?Which pieces will be done internally and which will be done externally?What statistical analysis will be performed ?How will the results be communicated in the organization?
29 Design the Research Instrument or Form Relevant when you are using primary dataInterviewsObservationThe type of form used can seriously effect the nature and/or the quality of the data.
30 Identifying the Sample How many units?30How should the units be chosen?From where should the units come?Who or what type of units?
31 Collecting the Data Interviewer-administered survey Self-administered surveyBefore data analysis there are two processesEditing, or ensuring that the data is complete and correctly filled outCoding, or transforming into a suitable form for analysis
32 Interrelationship Check In order to create the data collection form, it is important to know what type of data the company or organization is planning to collect and what type of sample is being used
33 Analyzing Data and Interpreting Results The types of data analysis used depend on the nature of the dataThe nature of the data is determined by the type of data collection method used as well as other factors
34 External Providers of Marketing Research Many organizations, even those with internal marketing departments, call on external research agencies.The top 25 large marketing research firms account for 75% of the dollar spend on research services.
35 Factors to Consider in Deciding to Use External Suppliers Credibility: perceived trustworthiness of the research and its findingsCompetence: special capability or facilities and external research firm can provideCost: in some cases can be less costly to hire an external firmCapacity: expand the capacity of the internal research department to meet immediate research needs
36 Exhibit 2.5 Criteria for Evaluating External Suppliers
37 Nickelodeon Wants to Know You How does Nickelodeon get a kid’s view point about a TV Show?Adopted a day-care center for testing new shows or new charactersConducted marketing research on a weekly basis in a NJ school. Researchers quiz the kids on all aspects of their lives
38 Nickelodeon Wants to Know You (Cont’d) How does Nickelodeon get a kid’s view point (cont’d)?Children are given disposable cameras to record their activities in photos and wordsConducts focus groups with school-age viewersWhat do you think about Nickelodeon’s research methods? Are there any ethical issues?
39 Code of Ethics Marketing Research Ethics may be viewed as Prohibiting selling or fundraising under the guise of conducting researchMaintaining research integrity by avoidance, misrepresentation, and omission of pertinent research dataTreating outside clients and suppliers fairly
40 Stakeholders of Basic Ethical and Business Principles Research SuppliersField Service FirmsResearch subjects or respondentsClientsGeneral public
41 Council for Marketing and Opinion Research - Respondent Bill of Rights
42 An Ethical Situation -You Decide For instance, take a respondent’s right of privacyGoogle’s new Gmail serviceWent beyond traditional services by scanning mail for key words and then delivering advertising along with the messages
43 An Ethical Situation -You Decide (Cont’d) Gmail is also storing subscribers s even after they close their accountsGoogle clearly spells out its policies for Gmail in the conditions for using the service section of the websiteDo Gmail’s practices violate a consumer’s right to privacy?
44 An Ethical Situation -You Decide (Cont’d) Does this notice cover Google’s ethical responsibility to its customers?Do you feel that technological advances are eroding individual’s privacy?
45 Differing Interpretations of the Codes A marketing researcher working on a project for a new client needs background information on competitive trends in the client’s industry. She contacts an advertising executive friend who formerly had the account of the client’s chief competitor.How do you feel about the appropriateness of the data collection method as described in this scenario?